Check this out. This is a real picture of signs in cars on the showroom of Timberline Dodge in Portland:

http://blog.oregonlive.com/business_impact/2009/06/large_chrysler.jpg

I can't hardly believe what I'm seeing.

Also, I have to say that I'm at most impressed with the twist of ironic destiny that Chrysler is being sold to "Fiat." That's perfect!

Saul Good

06-08-2009, 05:18 PM

Also, I have to say that I'm at most impressed with the twist of ironic destiny that Chrysler is being sold to "Fiat." That's perfect!

Isn't there a car company named "annihilation of the separation of powers" that could buy them instead?

banyon

06-08-2009, 06:14 PM

The sign should say "GOVERNMENT FORCED SALE TO COVER THE LOANS WE SIGNED FOR AND COULDN'T PAY FOR AND THE BANKRUPTCY COURT WOULD NOT LET US WEASEL OUT OF".

petegz28

06-08-2009, 06:17 PM

The sign should say "GOVERNMENT FORCED SALE TO COVER THE LOANS WE SIGNED FOR AND COULDN'T PAY FOR AND THE BANKRUPTCY COURT WOULD NOT LET US WEASEL OUT OF".

That is bullshit banyon. Many profitable dealerships are being forced to close. Your statement is total crap when directed to dealerships.

and you know this

banyon

06-08-2009, 06:25 PM

That is bullshit banyon. Many profitable dealerships are being forced to close. Your statement is total crap when directed to dealerships.

and you know this

Who is forcing them to close?

Saul Good

06-08-2009, 06:25 PM

The sign should say "GOVERNMENT FORCED SALE TO COVER THE LOANS WE SIGNED FOR AND COULDN'T PAY FOR AND THE BANKRUPTCY COURT WOULD NOT LET US WEASEL OUT OF".

The dealers were trying to weasel out of loans? Link?

banyon

06-08-2009, 06:29 PM

The dealers were trying to weasel out of loans? Link?

Obviously it's the companies affiliated with the dealerships.

petegz28

06-08-2009, 06:33 PM

Who is forcing them to close?

The car company via the new owners. There are several, several profitable dealerships being forced to close.

petegz28

06-08-2009, 06:34 PM

Obviously it's the companies affiliated with the dealerships.

Dude you are like blaming your local ABC news affiliate for problems at ABC.

2bikemike

06-08-2009, 06:40 PM

The car company via the new owners. There are several, several profitable dealerships being forced to close.

Exactly, I have an aquiantence who owns a dealership. He diversified makes to ensure his success. He sold Pontiacs, Chryslers and Mazda's. He obviously lost his Pontiac line. Chrysler has pulled his dealership because he was a multiple make dealership. So he is down to Mazda. He pretty much got screwed in this deal.

banyon

06-08-2009, 06:47 PM

The car company via the new owners. There are several, several profitable dealerships being forced to close.

Oh, I see. I thought the sign in the car window said something about the government forcing them to close. My bad. Thanks for straightening me out on that.

petegz28

06-08-2009, 06:48 PM

Oh, I see. I thought the sign in the car window said something about the government forcing them to close. My bad. Thanks for straightening me out on that.

Ok, play your stupid games. The government owns the car makers now...so they are telling them to close.

banyon

06-08-2009, 06:50 PM

Ok, play your stupid games. The government owns the car makers now...so they are telling them to close.

Did they tell them to take taxpayer money? To file bankruptcy? Or to take out the massive debts that they couldn't pay for in the first place?

petegz28

06-08-2009, 07:03 PM

Did they tell them to take taxpayer money? To file bankruptcy? Or to take out the massive debts that they couldn't pay for in the first place?

Separate argument. Unless you are conceding the point.

Saul Good

06-08-2009, 07:12 PM

Did they tell them to take taxpayer money? To file bankruptcy? Or to take out the massive debts that they couldn't pay for in the first place?

You're all over the place, Ban. You keep referencing the deals made between the government and GM and acting as if the dealers were a party to them.

Having reviewed the pattern of assumption and rejection of dealers throughout their region, I have detected a pattern: In every market where there is a dealership connected with former Penske Automotive executive Steve Landers, or his new automotive partnership with “Mac” McLarty (former Chief of Staff for President Clinton) and Robert L. Johnson (majority owner of the Charlotte Bobcats), the competitors are rejected.
In the Little Rock, Landers Chrysler Dodge Jeep is located far out of town in Benton, Arkansas. Nevertheless, the two Little

Rock dealers, Cook and Crain were rejected.
In the Fayetteville, Arkansas area, Landers-McLarty Dodge Chrysler Jeep is located far out of town in Bentonville, Arkansas. Competitors Springdale Dodge Chrysler, Steve Smith County Jeep and Jones Brothers were all rejected.

In the Springfield, Missouri market, Tri-Lakes Motors (a Landers-McLarty dealership) is located in Branson, Missouri. Competitors Heritage Chrysler Jeep in Ozark, Missouri and Ramsay Motor Company in Harrison, Arkansas were rejected. A pattern seems to be emerging. Everywhere there is a Landers-McLarty dealership, Chrysler has rejected the competition.
In the Huntsville, Alabama market, Landers McLarty Dodge Chrysler Jeep, is located in Huntsville. Competitor Cloverleaf Chrysler Dodge Jeep was rejected.

Favoritism and cronyism towards preferred dealer group is not a valid exercise of business judgment.

Here's more linkage. This one includes talk about Chrysler wanting to open more dealers right after they close all these. Without transparency that Obama claims to love, the closing of these dealers appears to not be as much about profitability, but more about political affiliations.

You're all over the place, Ban. You keep referencing the deals made between the government and GM and acting as if the dealers were a party to them.

I don't know of any taxpayer money that this dealership took, do you?

It's part of their franchisee agreement I woud assume. If they don't get anything from the manufacturer or their financing arm, then why be a brand name dealer? Indeed, what legal authority would the manufacturer have to do anything with the dealer without the franchisee agreement?

Here's more linkage. This one includes talk about Chrysler wanting to open more dealers right after they close all these. Without transparency that Obama claims to love, the closing of these dealers appears to not be as much about profitability, but more about political affiliations.

again, this is the decision of the manufacturer not Obama. and your post says nothing to the contrary.

banyon

06-08-2009, 07:49 PM

You know, for all the people lately whining about how much government involvement there is in private industry, you've all got it exactly backwards. There's too much private industry involvement in government. Why else would we be handing over billions upon billions to private companies of taxpayer money and doing things pretty much how they want while bankrupting the treasury? What liberal interest groups (or even socialist ones) have advocated handing these billions to any private companies?

These lobbyists are bailing out their buddies and the people who would normally be burned in a proper risk-loss scenario and it's atrocious, but pretending it's some big pro-government initiative really conflates what the real problem is. All indications are that after they bail out their buddies, the "market" wil be allowed to return to "normal".

Saul Good

06-08-2009, 07:53 PM

These lobbyists are bailing out their buddies and the people who would normally be burned in a proper risk-loss scenario and it's atrocious, but pretending it's some big pro-government initiative really conflates what the real problem is.

Now the lobbyists are the ones bailing out these companies? You're really off your game today.

banyon

06-08-2009, 07:55 PM

Now the lobbyists are the ones bailing out these companies? You're really off your game today.

What? Is what I said hard to understand?

petegz28

06-08-2009, 07:58 PM

It is pretty hard to justify closing a profitable dealership when you are hurting for cash. In fact it makes 0 sense.

banyon

06-08-2009, 08:03 PM

It is pretty hard to justify closing a profitable dealership when you are hurting for cash. In fact it makes 0 sense.

Y = (AFC +AVC) - Revenue.

Is there something that's changed about that equation?

petegz28

06-08-2009, 08:16 PM

Y = (AFC +AVC) - Revenue.

Is there something that's changed about that equation?

well let's se...I am a car maker...I need to sell cars...so i cutoff those profitable dealerships that are selling my cars......

yep...fuzzy fucking math

banyon

06-08-2009, 08:19 PM

well let's se...I am a car maker...I need to sell cars...so i cutoff those profitable dealerships that are selling my cars......

yep...fuzzy ****ing math

Why do you feel that an individual dealership's profitability should be the only factor in the decision that Chrysler uses?

petegz28

06-08-2009, 08:21 PM

Why do you feel that an individual dealership's profitability should be the only factor in the decision that Chrysler uses?

Well if I want to sell cars I think closing down dealers that are selling them successfully is not in my best interest. The only way to justify that is to say they are not selling enough...therefore I should get out of the car making business. Which is probably what Chrysler should do anyway. But that isn't the case. Therefore it is the profitable dealerships that are going to be able to stay in business and continue to buy my cars from me. Again..probably should hang on to such things.

banyon

06-08-2009, 08:24 PM

Well if I want to sell cars I think closing down dealers that are selling them successfully is not in my best interest. The only way to justify that is to say they are not selling enough...therefore I should get out of the car making business. Which is probably what Chrysler should do anyway. But that isn't the case. Therefore it is the profitable dealerships that are going to be able to stay in business and continue to buy my cars from me. Again..probably should hang on to such things.

What if there are a couple of dealerships that cover a square area where there is an unprofitable dealership right in the center? Shouldn't they be able to factor that in? What if one dealership's profitability numbers for the year are an aberration for the last 20 years worth of data? What if one region's (say Detroit) economic outlook is significantly worse for the next 10 years than a high-growth area? Isn't the rule for business supposed to be "location, location, location?"

SBK

06-08-2009, 08:24 PM

Once a car is on the dealers lot they have bought it. That car is no longer Chryslers property, so a forced sale involves the small dealership, not the giant company.
Posted via Mobile Device

banyon

06-08-2009, 08:25 PM

Once a car is on the dealers lot they have bought it. That car is no longer Chryslers property, so a forced sale involves the small dealership, not the giant company.
Posted via Mobile Device

So, how did the large company have the ability to tell them to close?

petegz28

06-08-2009, 08:39 PM

What if there are a couple of dealerships that cover a square area where there is an unprofitable dealership right in the center? Shouldn't they be able to factor that in? What if one dealership's profitability numbers for the year are an aberration for the last 20 years worth of data? What if one region's (say Detroit) economic outlook is significantly worse for the next 10 years than a high-growth area? Isn't the rule for business supposed to be "location, location, location?"

What if? What if? What if? What if I need money and I close down those that are making me money?

petegz28

06-08-2009, 08:40 PM

So, how did the large company have the ability to tell them to close?

Odds are that most dealerships being closed are not Democratic and\or Obama supporters.

SBK

06-08-2009, 10:19 PM

So, how did the large company have the ability to tell them to close?

You didn't read my earlier post.
Posted via Mobile Device

banyon

06-08-2009, 10:31 PM

What if? What if? What if? What if I need money and I close down those that are making me money?

So, you won't acknowledge my questions or the point I was making?

banyon

06-08-2009, 10:32 PM

You didn't read my earlier post.
Posted via Mobile Device

It doesn't answer my question combined with the question you asked.

Taco John

06-08-2009, 11:09 PM

The sign should say "GOVERNMENT FORCED SALE TO COVER THE LOANS WE SIGNED FOR AND COULDN'T PAY FOR AND THE BANKRUPTCY COURT WOULD NOT LET US WEASEL OUT OF".

It's like a reflex with you. Always there to protect your Golden God Government.

Taco John

06-08-2009, 11:13 PM

You know, for all the people lately whining about how much government involvement there is in private industry, you've all got it exactly backwards. There's too much private industry involvement in government.

These issues are part and parcel with eachother. This is what I've been trying to educate you on for years. At least you see one direction of it. Maybe someday, you'll open your eyes up to the follow-through consequences.

***SPRAYER

06-08-2009, 11:13 PM

So, you won't acknowledge my questions or the point I was making?

Shut up, asshole.

:drool:

SBK

06-08-2009, 11:16 PM

It doesn't answer my question combined with the question you asked.

You're assuming that Chryslers path to prosperity is to close dealerships that they do not own in order to make it harder for customers to buy their products. That's how the gov't works, not private sector.

Which brings me to the point you've missed all along. It's not Chrysler that is forcing these dealers closed.

RaiderH8r

06-09-2009, 10:09 AM

Why do you feel that an individual dealership's profitability should be the only factor in the decision that Chrysler uses?

Because it is a business in the market to make a profit. At least that's how I understand business. I could be wrong. Maybe they're in business to make happy rainbows and puppy dog kisses in which case I haven't seen any data on that so the Obamessiah may have closed the appropriate dealerships. I accept my shortcomings as a mere mortal in the face of the Obamessiah.

KC native

06-09-2009, 10:31 AM

You're assuming that Chryslers path to prosperity is to close dealerships that they do not own in order to make it harder for customers to buy their products. That's how the gov't works, not private sector.

Which brings me to the point you've missed all along. It's not Chrysler that is forcing these dealers closed.

Um, yes it is. Chrysler drew up the plans for which dealerships would close.

Amnorix

06-09-2009, 11:01 AM

The car company via the new owners. There are several, several profitable dealerships being forced to close.

Profitable for who? If it was great for Chrysler, then they probably wouldn't be closing them, no?

Amnorix

06-09-2009, 11:06 AM

Once a car is on the dealers lot they have bought it. That car is no longer Chryslers property, so a forced sale involves the small dealership, not the giant company.
Posted via Mobile Device

You know that's not a clean sale, right? It's typically financed at very low rates, subject to return and with a host of caveats, etc., right?

It's not like Chrysler looks at a dealership with 100 cars on the lot and says "great, we booked 100 sales and we're DONE -- hope the dealer can sell them but if not, it's not our problem."

Not even close.

Amnorix

06-09-2009, 11:07 AM

It's like a reflex with you. Always there to protect your Golden God Government.

Shrug. It's not different from your equal and opposite reaction.

Amnorix

06-09-2009, 11:08 AM

These issues are part and parcel with eachother. This is what I've been trying to educate you on for years. At least you see one direction of it. Maybe someday, you'll open your eyes up to the follow-through consequences.

While you are right that it's a two way incestuous street, that's been true for time immemoriam for every government in every country in history.

Amnorix

06-09-2009, 11:28 AM

Because it is a business in the market to make a profit. At least that's how I understand business. I could be wrong. Maybe they're in business to make happy rainbows and puppy dog kisses in which case I haven't seen any data on that so the Obamessiah may have closed the appropriate dealerships. I accept my shortcomings as a mere mortal in the face of the Obamessiah.

First, the profitability of the dealership is not necessarily directly correlative with the profitability of Chrysler. Dealership X may be more profitable than Dealership Y for a number of reasons unrelated to the sheer volume and margin of the cars they sell. Lease terms and other fixed overhead, etc. ad infinitum.

Second, bankruptcy is a chance for a clean sweep. Broom out whoever you want for any reason you want. Everyone here is quick to assume that Obama is personally selecting the winners and losers due to political favoritism. Is it not possible that some of these dealers, who may be profitable in and of themselves, are getting broomed for other reasons. A few random possibilities:

1. Town has two dealers. A and B. A is more profitable. B is in a better location, has a longer term lease, and more important from CHRYSLER'S point of view, it sells more cars using Chrysler financing, which is very profitable FOR CHRYSLER. Dealer A is owned by the brother of the town's local bank President, and sends alot of business to his brother instead of to Chrysler financing. A may be more profitable, but B is better in the long run for Chrysler.

2. Town has three dealers. X, Y and Z. Z is very profitable. Z has also generated compliants relating to sexual harassment. The owner is a scumball. GReat salesman but all hands. Three potential lawsuits by employees over the last five years were quietly settled. Chrysler is worried that permitting him to remain in business with Chrysler's name while continuing to engage in this conduct could get them involved in a very high profile and ugly lawsuit. Z gets the broom.

3. Town has two dealers. C and D. C is somewhat more profitable than D. C is owned by an annoying bastard who complains constantly. He's very high maintenance to deal with. It takes much more time and effort to deal with his (usually unjustified) complaints than to deal with D.

4. Town has two dealers. E and F. E is more profitable. It is owned by a fellow who is going on 75 years of age. There is no clear successor to running the business. F is a new business started 2 years ago by a guy who came over from Toyota and really knows his stuff. His sales are growing fast.

And this from someone who doesn't know THAT much about car dealerships (though I have been involved in a transaction involving buying/selling a car dealership and getting a line of credit for one, so I know more than many I'd imagine). There are ALOT of reasons that a "profitable" dealership could be less than ideal for the brand to keep open that have nothign to do with all the shady dealing that people here are automatically envisioning.

Chief Henry

06-09-2009, 11:31 AM

"Government forced liquidation" How sad is that ?

But hey - at least the Chinese are NOW afraid of our currency.

RaiderH8r

06-09-2009, 11:44 AM

First, the profitability of the dealership is not necessarily directly correlative with the profitability of Chrysler. Dealership X may be more profitable than Dealership Y for a number of reasons unrelated to the sheer volume and margin of the cars they sell. Lease terms and other fixed overhead, etc. ad infinitum.

Second, bankruptcy is a chance for a clean sweep. Broom out whoever you want for any reason you want. Everyone here is quick to assume that Obama is personally selecting the winners and losers due to political favoritism. Is it not possible that some of these dealers, who may be profitable in and of themselves, are getting broomed for other reasons. A few random possibilities:

1. Town has two dealers. A and B. A is more profitable. B is in a better location, has a longer term lease, and more important from CHRYSLER'S point of view, it sells more cars using Chrysler financing, which is very profitable FOR CHRYSLER. Dealer A is owned by the brother of the town's local bank President, and sends alot of business to his brother instead of to Chrysler financing. A may be more profitable, but B is better in the long run for Chrysler.

2. Town has three dealers. X, Y and Z. Z is very profitable. Z has also generated compliants relating to sexual harassment. The owner is a scumball. GReat salesman but all hands. Three potential lawsuits by employees over the last five years were quietly settled. Chrysler is worried that permitting him to remain in business with Chrysler's name while continuing to engage in this conduct could get them involved in a very high profile and ugly lawsuit. Z gets the broom.

3. Town has two dealers. C and D. C is somewhat more profitable than D. C is owned by an annoying bastard who complains constantly. He's very high maintenance to deal with. It takes much more time and effort to deal with his (usually unjustified) complaints than to deal with D.

4. Town has two dealers. E and F. E is more profitable. It is owned by a fellow who is going on 75 years of age. There is no clear successor to running the business. F is a new business started 2 years ago by a guy who came over from Toyota and really knows his stuff. His sales are growing fast.

And this from someone who doesn't know THAT much about car dealerships (though I have been involved in a transaction involving buying/selling a car dealership and getting a line of credit for one, so I know more than many I'd imagine). There are ALOT of reasons that a "profitable" dealership could be less than ideal for the brand to keep open that have nothign to do with all the shady dealing that people here are automatically envisioning.

It's funny that in the link you post... they directly mention that Chrysler came up with the closing formula, not the government...

Now, and this is important, Chrysler claimed that its formula for determining whether a dealership should close or not included "sales volume, customer service scores, local market share and average household income in the immediate area."And from this link: http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN2632731920090526

The lawyer(Leonard Bellavia) is the only one saying that it wasn't Chrysler's idea. A Chrysler spokeswoman directly stated that the decision did not come from the government task force.

A spokeswoman for Chrysler said the decision to cut a
quarter of the dealers was "not coming from the task force."

"Our position is that the market can't support the number of
dealers that are out there," said spokeswoman Carrie McElwee.
"This has been our plan for more than 10 years to combine
Chrysler, Dodge and Jeep under one roof."

The decision about cutting dealers took into consideration
factors like location, customer satisfaction, and sales
potential, she said. Nearly half of the terminated dealers also
carry non-Chrysler brands, and most rely on used vehicles for
the bulk of their sales.That quote is directly from Chrysler.

I note KC Fish's response to your post, refuting it in some detail. I lack data to know who is right and who is wrong.

All the allegations in the article you quote, IF TRUE, would be very disturbing and ought to looked into. Until there's some verification, I'd prefer to see OMB or the Justice Department quietly look into it.

I have become very unenamored of high profile Congressial inquiries and independent counsels since the process was so thoroughly misused.

Calcountry

06-09-2009, 12:41 PM

The sign should say "GOVERNMENT FORCED SALE TO COVER THE LOANS WE SIGNED FOR AND COULDN'T PAY FOR AND THE BANKRUPTCY COURT WOULD NOT LET US WEASEL OUT OF".Could we make it in small print at the bottom of the sign?

Amnorix

06-09-2009, 12:43 PM

This seems reasonably balanced, as opposed to various right/left wing nut theories:

Earlier this week we mentioned an internet-borne conspiracy theory that the Chrysler dealership closings had a partisan tilt. Basically, some blogs believed that dealers who donated to Republicans were heavily represented on the list of closed dealers.

We were pretty skeptical, and we got some comments and emails wondering why we even bothered writing up that "wingnut" conspiracy story.

Well, whatever, the story isn't going away. And it's even reached the halls of Congress.

Mark Tapscott at the Washington Examiner (http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Furor-grows-over-partisan-car-dealer-closings-46261447.html) picks it up
Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.

The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far (http://directorblue.blogspot.com/2009/05/dealergate-statistical-evidence-that.html)that is being closed that contributed to the Obama campaign in 2008?

The story has angered Florida Rep. Vern Buchanan learned from a House colleague that his hometown dealership is on the closed list, so expect to hear some noise in Washington.

As for the Mack McLarty dealership, it is an interesting situation. The basic story is that McLarty is a co-owner of a big dealership chain RLJ-McClarty. The J is Robert Johnson, the founder of Black Entertainment Television (BET) and a big donor to the Democratic party.

The blog Director Blue (http://directorblue.blogspot.com/2009/05/dealergate-statistical-evidence-that.html) (warning: it's a right-wing blog, so don't have a heart attack once you get there) notes how odd it is that this multi-dealership chain didn't have a single closure and that in its various markets, it was always a competitor that got shut down. Put another way, RLJ-McClarty Chrysler dealerships in states like Arkansas, Missourri and Alabama just got a lot less competition.

Conversely, stats-god Nate Silver (http://www.fivethirtyeight.com/2009/05/news-flash-car-dealers-are-republicans.html) throws cold water on the whole thing, noting that car dealer deanerships go 88% to Republican candidates. He says this isn't a conspiracy, it's just bad math. But as Megan McArdle (http://meganmcardle.theatlantic.com/archives/2009/05/closing_chryslers_dealers_cui.php) notes, it's still odd that they've only found one Obama donor on the closed list (12% Democratic donation rate is small, but it's not nil). And the fact that the one really Democratic chain went unscathed also raises eyebrows.

The best way for this to end would be for the government to provide even a smidgen of insight into how it selected dealerships for closure. So far, it really hasn't offered a thing.

Meanwhile, the left wing refutation of the statistical data regarding contributions makes sense, IF accurate:

Overall, 88 percent of the contributions from car dealers went to Republican candidates and just 12 percent to Democratic candidates. By comparison, the list of dealers on Doug Ross's (http://directorblue.blogspot.com/2009/05/red-alert-did-campaign-contributions.html) list (which I haven't vetted, but I assume is fine) gave 92 percent of their money to Republicans -- not really a significant difference.

There's no conspiracy here, folks -- just some bad math.

It shouldn't be any surprise, by the way, that car dealers tend to vote -- and donate -- Republican. They are usually male, they are usually older (you don't own an auto dealership in your 20s), and they have obvious reasons to be pro-business, pro-tax cut, anti-green energy and anti-labor. Car dealerships need quite a bit of space and will tend to be located in suburban or rural areas. I can't think of too many other occupations that are more natural fits for the Republican Party. Unfortunately, while we are still a nation of drivers, we are not a nation of dealers.

And there's this on Zero Hedge. The author tried to extrapolate and data mine and got her ass handed to her in the comments. Read the post and the comments (btw it's kind of wordy and she misleads because the results weren't statistically significant but she tried to imply that the errors gave the idea of some funny business).

Edit: Eh fuck it I don't feel like finding the original post but here's her correction.

Monday, June 1, 2009
You're the worst thing that's ever happened to me.
Posted by Marla Singer at 3:30 AM
Hoping that our readers might enjoy a sneak preview of what we were working on, we decided to post our preliminary results on the Chrysler dealer data we crunched all weekend.

It will be a cold day in hell before we do that again, you can be sure.

The reaction was complicated by my typing "Why would there be an significant and highly positive correlation between dealer survival and Clinton donors?"

I didn't mean "statistically significant," but that was all it took. A number of blogs fixated on this sentence and ignored the next two, "Granted, that P-Value (0.125) isn't enough to reject the null hypothesis at 95% confidence intervals (our null hypothesis being that the effect is due to random chance), but a 12.5% chance of a Type I error in rejecting a null hypothesis (false rejection of a true hypothesis) is at least eyebrow raising. Most statisticians would not call this a "find" as 95% confidence intervals are the gold standard for this sort of work." You can imagine the result.

As a measure of how partisan this issue is, both sides of the aisle had it out over sentence structure all day. We were severely chastised (in my case rightly so) and that was further complicated by my posting without explanation, the results of six regressions absent any narrative about our experimental design, our order of testing and the like. This subjected us to "data fishing" criticisms. (Probably warranted to some small degree- though some readers went so far to accuse us of outright fraud). What began as an attempt to give our readers some transparency devolved into a mess of sound bytes. The fault is entirely mine for expecting civil peer review or anything like it in such a forum. A mistake I shall not repeat with early findings again.

When we pointed out that we found no support for a republican "enemies list" the response was that we had shifted our theory to match the new data. (This is odd since we never thought there was an enemies list). This should have been SOME news at least- at least that the present data didn't seem to support a theory that's been all over the MSM.... Somehow this little bit got lost even by the people you would have expected to pick it up. Talk about focus!

The slew of email I received ranged from "thanks" to "you are the spawn of the devil." The latter is obviously closest to the truth, so we are sending that reader the Marla Singer Stolen Jeans prize. His name was Robert Paulson.

We planned to release the data publicly today, but we are having second thoughts about that particular plan. Nothing makes a researcher feel less like sharing than being told what a moron they are after 48 hours of straight dataset preparation.

We have come up with a few ideas instead.

1. We are considering creating a members-only section for research and data like this. This would be the place we would release preliminary findings and datasets we have put a great deal of (uncompensated) (wo)manhours into. We may or may not then release final results to the public. Or we may after a substantial delay.

2. We may send datasets like this one to qualified and interested parties who request it by email. (This is where we are leaning for this particular set at the moment).

This means that everyone who isn't a certified space monkey is going to have to wait for the integration of the GM dealer closing data.

As our dataset is a derivative of the CRP, we will be distributing it (to the extent that we do) under the creative commons Attribution-Noncommercial-Share Alike license (though we may ask you respect the embargo time before we release it publicly).

I'll decide at the end of this note.

About the Data - Dataset creation:

Individual donor records from the Center for Responsive Politics for the 2008 election cycle (~800 megs, n=3542585) were converted to a .csv file. (Please consider donating to the Center here). Chrysler dealer records were compiled from dealer closing and dealer survival records (n=3129 after the elimination of mangled or unusable entries). These were obtained from bankruptcy documents and converted to excel. Both datasets were imported into an SQL database (after abortive attempts to run matching with less effective but more amusing methods-- at this size Excel and Access were useless so we had to rely on custom SQL queries for the initial extraction).

The dealer dataset was matched against full last name and first 2 characters of first name of the "majority owner" field v. the name of donor field in the CRP dataset. (Single initial first names were also matched). Records that matched were merged into a new file. The matching result produced a new data subset (n=~10000). This subset was filtered by first 2 charters in zip code. The resulting initial match dataset yielded n= ~6200 records including all political donations made by potential name matches, and preserving multiple donations from one majority owner name. In the case where a single majority owner owned several dealerships, records for each dealership/donation pair were created. In this way we could link dealership fates with their owner's political acts.

As the CRP data includes self-identified profession and employer data, we edited the automated match list by hand by first looking for a match between CRP employer or profession and the name of the dealership in the dealership dataset. We also cross checked full name entries-- in cases where small details like middle initial disagreed but the two datasets agreed on employer as a dealership we preserved the record. If no clear match was found with employer / profession we then looked to other connections- for instance common CRP donor codes with other records where the donor listed a known dealer as employer / profession. Some professions caused us automatically to look for other evidence (self-employed, business owner, etc) which often led us to find donors we might have otherwise passed by.

We had finished the first pass of this edit when we ran our first regressions and published the preliminary results.

We've since made a second pass and caught some more bad matches.

The newest resulting hand-edited dataset (n=5117) includes a single entry for each dealership with no matched political donations and at least one entry for each dealership where majority owners donated in a fashion tracked by CRP individual donor data.

Each individual dealership was assigned a numeric ID code. After filtering for double entries and subject to our removal of mangled or unreadable records the dataset contained 2923 individual dealer codes. This is somewhat less than the reported ~3200 total dealers reported as current by Chrysler.

Using a pivot table keyed on individual dealer ID code we tabulated several variables from the CRP/Dealer data including:

Using pivot tables in Excel sorted by dealer code, we then aggregated all donation data by Dealer ID. In this way we captured the entire donation profile of a given Majority Owner and assigned to to each of his/her dealers. We used this dataset in our regression analysis.

Update: 3:30 am:

Some limitations to the data:

1. We are only counting majority owners in our donor matches. It's entirely possible that other influential donors who are minority owners, or former owners or otherwise connected in ways we cannot see are not being counted. Perhaps a son or relative has taken over the business but "Dad" or "Grandpa" still holds a majority stake. We caught several "retired" donors who were obviously still owners of dealers. We might be undercounting for this reason.

2. While we have PAC data, it is not sorted by party (for obvious reasons). To the extent PAC money is flowing someplace that might make a difference we cannot see it. (It would be fun to look at PAC (Labor) donations v. saved dealers, no?)

3. We don't have any data on dealer profitability. This is a pretty important factor we'd like to account for. Since this is generally claimed or understood to be a major factor, we might get stronger results out of the data (or weaker results for that matter) if we had the ability to add it as a variable.

5. We haven't added older (2006, 2004) data yet. We have no idea if it will make a difference, but it might.

6. We don't have a good way of capturing organizational giving at this point. ABC Chrysler, Golden Hills may have donated gobs to Republicans and we'd never know about it because we are stuck with individual donor data.

Some general interesting facts:

Dealers: 2923

Dealers terminated: 702
Dealers saved: 2221
Dealers with Majority Owners who donated to republicans: 429
Dealers with Majority Owners who donated to republicans also terminated: 100
Dealers with Majority Owners who donated to democrats: 174
Dealers with Majority Owners who donated to democrats also terminated: 43
Dealers with Majority Owners who donated to both: 80
Dealers with Majority Owners who donated to both also terminated: 19
Dealers with Majority Owners who donated to no one (not even PACs): 2111
Dealers with Majority Owners who donated to no one (not even PACs) also terminated: 517

etc. etc. etc.

Initially we were interested in testing the hypothesis that donating to Obama in the 2008 election cycle might result in higher than average survival rates among dealers.

The data wouldn't come close to rejecting the null hypothesis there. (p-value ~0.7)

We still think there is enough to be curious here, but clearly our model is insufficient to understand what's going on in any statistically significant way. The reader will have to answer for themselves if such a p-value is eyebrow raising or not. (Perhaps someone will conduct a Bayesian analysis for this p-value and the Maureen White connection for us).

I don't plan to be so silly as to offer more commentary this time, and I'm only putting up the new regressions to quell the flames.

Alright, I've decided.

If you'd like the raw, merged dataset, drop me an email (marla @ zerohedge d o t com) with your stats qualifications and the like and we'll work something out. You'll probably get at least a week with the stuff on your own before we open the floodgates.

If you'd just like us to run some testing against what we have, just let us know and we'll see what we can do for you.

Likewise, if you think we've blown something, why not write us a nice note telling us how it should be done to meet with your satisfaction? We're happy to give it a shot- if you're polite about the whole thing.

Calcountry

06-09-2009, 03:39 PM

I note KC Fish's response to your post, refuting it in some detail. I lack data to know who is right and who is wrong.

All the allegations in the article you quote, IF TRUE, would be very disturbing and ought to looked into. Until there's some verification, I'd prefer to see OMB or the Justice Department quietly look into it.

I have become very unenamored of high profile Congressial inquiries and independent counsels since the process was so thoroughly misused.James Carville voice on/you know, dat Ken staaaa, he an animal dat ken staa, 4 years 40 million dollars dat Ken staa.

Chief Henry

06-09-2009, 04:17 PM

It is pretty hard to justify closing a profitable dealership when you are hurting for cash. In fact it makes 0 sense.

Obama's never run a dam thing, not even a candy store. Why should closing a profitable dealership stand in the way of him making an executive decision.

Dave Lane

06-09-2009, 04:25 PM

Well if I want to sell cars I think closing down dealers that are selling them successfully is not in my best interest. The only way to justify that is to say they are not selling enough...therefore I should get out of the car making business. Which is probably what Chrysler should do anyway. But that isn't the case. Therefore it is the profitable dealerships that are going to be able to stay in business and continue to buy my cars from me. Again..probably should hang on to such things.

It allows them to get rid of competition. In the long run bad for consumers but good for long term stability of remaining dealers. I tend to disagree but its their choice.

banyon

06-09-2009, 06:54 PM

These issues are part and parcel with eachother. This is what I've been trying to educate you on for years. At least you see one direction of it. Maybe someday, you'll open your eyes up to the follow-through consequences.

You're assuming that Chryslers path to prosperity is to close dealerships that they do not own in order to make it harder for customers to buy their products. That's how the gov't works, not private sector.

Which brings me to the point you've missed all along. It's not Chrysler that is forcing these dealers closed.

I think others have already addressed that this view is mistaken and that there's no evidence for it.

banyon

06-09-2009, 06:55 PM

It's like a reflex with you. Always there to protect your Golden God Government.

Out of sheer morbid curiosity, what did you think should have happened with these dealerships?

Calcountry

06-09-2009, 06:56 PM

Obama's never run a dam thing, not even a candy store. Why should closing a profitable dealership stand in the way of him making an executive decision.Soon, he will be appologizing to everyone for all the greed the car companies created over the years.

Baby Lee

06-09-2009, 07:25 PM

Odds are that most dealerships being closed are not Democratic and\or Obama supporters.

Are 'dealerships' the new term for community organizing centers?

If not, duh.

Direckshun

06-09-2009, 07:35 PM

Odds are that most dealerships being closed are not Democratic and\or Obama supporters.

THERE IS NO CAR-DEALER CONSPIRACY.... A whole lot of right-wing blogs are worked up today over a report about the political affiliations of Chrysler dealers who've been shut down.

Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans [sic]. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.

The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?

Rep. Vern Buchanan (R-Fla.), who has a dealership that will close, called this "an outrage." A variety of far-right bloggers chose more colorful language.

And what is the "evidence" of a partisan conspiracy that "appears to be mounting"? As you might have guessed, like most conservative theories, this one is extremely thin. The argument, in a nutshell, is that Chrysler dealers owned by a variety of Republican donors are being closed, the government is now involved with Chrysler's restructuring, so that points to "evidence" that the Obama administration is deliberately punishing GOP contributors.

Nate Silver, who has a nasty habit of using pesky things like facts to respond to silly arguments, explained, "There is just one problem with this theory. Nobody has bothered to look up data for the control group: the list of dealerships which aren't being closed. It turns out that all car dealers are, in fact, overwhelmingly more likely to donate to Republicans than to Democrats -- not just those who are having their doors closed."

There is no conspiracy. The Obama administration is not using Chrysler's bankruptcy to punish individual Republican contributors. Conservative blogs jumped on this before thinking it through.